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President Chirac's proposal for a global air travel ticket tax to fund development seemed unlikely to fly less than a year ago, especially in America (where any new "tax" is taboo). (See the Jan. 2005 CGD event Innovative Development Finance Mechanisms: The Pros and Cons of the International Tax Plan for slides and the original proposal).
Now it's taken off. It's a good sign that ideas launched in 2005, the year of development, are gaining traction: the aviation tax is now a real thing -- at least in Europe. Questions will remain about whether money generated will end up cutting into current aid budgets, as my colleague Steve Radelet noted in Celia Dugger's NYT article, Five Nations to Tax Airfare to Raise Funds for AIDS Drugs. But one big problem with the original proposal has been solved. Americans can now be told where the money goes (the Global Fund to Fight AIDS, TB and Malaria) and for what (to buy AIDS drugs that keep people alive). America ought to sign on -- soon.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.